The US government and its allies froze around $300 billion of the Russian central bank's reserves—the nation's accumulated savings.

It was a stunning illustration of the political risk associated with the US dollar and Treasuries. It showed that the US government could deny access to another sovereign country's reserves at the flip of a switch.

Recently, President Joe Biden signed the REPO Act into law. It allows the US government to seize frozen Russian state assets and transfer the funds to Ukraine.

The US dollar and Treasuries have become weaponized in a way they had not before. They are now clearly not neutral assets worthy of forming the bedrock of the international financial system but political tools for Washington to coerce others.

The rising political risk attached to Treasuries has made them even less attractive as a store of value. It's now apparent to everyone that dollars are only dollars as long as you don't upset the US government.

Many countries are undoubtedly wondering if the US government will seize their savings if they run afoul with Washington.